Pulling in the globe-trotting consumer

Felicity Murray talks to Simon Knapp, commercial director - Europe for Beam Suntory, about the challenges today for brands competing in the global travel retail sector

Simon Knapp Beam Suntory

How important is travel retail to your business?

Travel retail is incredibly important to Beam Suntory, hence the reason we set up the travel retail division three years ago. And this, our third year, will be our most successful. We continue to grow, continue to learn about our customers and also to better understand what the travelling consumers need, which helps in terms of building our brand proposition.

What are the differences between GTR and domestic?

I guess on the product front we don’t want radical differences from one to the other. Potentially the value proposition is slightly different in GTR, because people are looking for value and quite often for something they can’t get elsewhere. Compared to a domestic off trade, we also have the luxury of having our customers held in one place for a period of time. Therefore, we also able to offer a more experience-based shopping environment, which is certainly what the younger audience is looking for.

How vital is having exclusive products and special packaging designs?

The packaging helps us a lot, particularly as there is a higher element of gifting in travel retail…even if it is gift buying for themselves. Most of the products we offer should therefore be gift worthy. Then, as we look at the premiumisation of spirits, there are some really nice, gifting products out there, and that’s important to us. However, consumers need to be able to link these back to a brand they recognise as well, because if we are too radically far away from the domestic market, or the bigger market, then it has less relevance to them and we end up trying to sell them a whole new story, which is a lot more difficult to do.

What do you see as the key opportunities?

I think there are loads of opportunities, particularly for us at Beam Suntory. We are still relatively young in this market but we are driving a lot of growth in all the categories and we are seeing strong double-digit growth, particularly in American Whiskies. We are leading the growth in that category. We have the number one rated bourbon and the top selling premium bourbon in both Jim Beam Black and Maker’s Mark. So I think, from that perspective, our opportunity is to make sure that people get that message in every single location and that we work with the retailers to do that.

The gin category of course is on fire as well, and we are fortunate enough to have Sipsmith’s gin in our portfolio, which we acquired back in November/December last year. It’s a fabulous heritage brand with a great story around how the owners broke down quite a lot of barriers to create that first craft gin in London. We will work with that story over the coming months and years as we start to grow the brand across the globe.  Also for us, Roku is launching a Japanese gin, which first hit the shelves in September. The Japanese symbol on the bottle means ‘six’ it’s distilled with six botanicals and it’s in an hexagonal bottle, and we have a special travel retail edition. It’s a product we are really, really proud of. So we now have a premium gin in Roku and a super premium in Sipsmith and we believe there are lots of opportunities in those areas for us.

We also have Bowmore single malt whiskies. We launched the age-dated range back into Bowmore last year and that’s worked incredibly well for us. We predict a strong return for Bowmore.

And the challenges?

The challenges are well documented: There are more passengers but they are not spending as much. Therefore we have a role along with the retailers to bring more people into stores - turn shoppers into buyers by giving them the experiences they want and the products they want.  We need to just listen more to consumers because I think what they want is changing and we should work with them to understand what it is that they want - more excitement, more experiential shopping – and the more points of difference that we can bring will really help.  The key thing is attracting people into the stores.

What are your objectives and strategy for strength?

I have spoken about a couple from a product perspective - the gins, the malts in Bowmore and Laphroaig, plus the bourbons. We don’t see big changes in trends next year - it’s still premiumisation and it’s still gifting, so overall those would be our strategies for growth and we will just continue doing what we are doing at the moment - it’s OK, it’s working…!                 

New technologies?

These we are embracing through our activations. When we did the Bowmore activation last year we had the virtual reality headset, giving people the opportunity to ‘vitually’ go to the Number One Vault and really feel they’ve been there.  This was the first spirits virtual reality experience in Dubai duty free, then we had something like 43 activations across Europe at the same time running so there was consistency. We will continue with the activations this year, keep embracing technology, making shopping very experienced based for consumers, thereby giving them a lasting memory as well as a product,

Forward plans?

Cognac is a challenged category I would say, not just for us, but for everyone…there’s a couple of players growing but overall it’s a tough category. What we are trying to do is back our VS, VSOP and XO by introducing a couple of new products - one on the gifting side and that will be a travel retail exclusive lantern pack, which is basically a VSOP in a really nice pack that once you open it you have two candle holders. The other thing we want to do is recruit more people into the Cognac category, so we are also launching Courvoisier Sherry Cask Edition, which has already won an award for its packaging. If we can by cross‑categorising it bring people back into the Cognac category and attract new audience back to Cognac….good!

22 November 2017